In the loop 16 August 2022

In the loop

Shireen Darmalingam

What you should know this morning:

The rand is weaker this morning, at R16.43/$, after closing weaker yesterday (R16.40/$*).
EM currencies were mixed yesterday; the RUB (+0.3%) and MXN (+0.1%) the gainers; the HUF (-2.3%), ZAR (-1.4%) and CZK (-1.3%) the losers.
Asian equity markets the Nikkei, Hang Seng and Shanghai Composite are up.

Japan’s tertiary industry index declined by 0.2% m/m in July, after having increased by 1.1% m/m in June.
Services, retail trade and business-related services declined in July.

The spotlight is on the UK labour market data today.
The ILO unemployment rate is expected to have remained at 3.8% in the three months to June, unchanged from the three months to May.
The BOE will keep an eye on today’s data ahead of its policy meeting next month.
The CPI data for July, due out tomorrow, will also be watched to gauge whether cost pressures have become more broad-based.
The BOE expects inflation to peak above 13% in October.

Germany's ZEW expectations gauge is due out today and is expected to remain deeply in negative territory in August.
The index is expected at -52.7 in August, from -53.8 in July.
The slight uptick is expected as the Nord Stream gas pipeline restarted following annual maintenance.
However, gas flows are at a fraction of volumes prior to the maintenance work.
The index of current conditions probably worsened further in August, to -49, from -45.8 in July.

US industrial production and manufacturing production for July are due out today.
Industrial production is expected to have increased by 0.3% m/m in July, after having declined by 0.2% m/m in June.
Manufacturing production is expected to have increased by 0.3% m/m in July, from a decline of 0.5% m/m in June.
Motor vehicles are expected to have boosted industrial production in July.
Utility output on account of warmer-than-normal temperatures is also expected to have supported output.
Mixed results are likely to emerge in other industries.

Brent crude oil is down this morning, and up by 21.2% year-to-date.
The gold price is down marginally this morning, and down by 2.6% year-to-date.

Brent crude oil is currently at $94.28/bbl; ($95.10/bbl*).
Gold is at $1781/oz ($1782/oz*).
SA CDS 243bps*, Brazil 248bps* and Turkey 675bps*.
Yields: US 10yr at 2.77%*, German bund at 0.90%* and SA 10-year generic at 10.49%*, SA’s R186 at 8.60%*.

* Denotes yesterday’s close.

Key events and data:

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